Forever 21 : What is your strength – that customers value?

It is sad to see that Forever 21 filed for bankruptcy. Their backstory is fascinating and the 5 minute video backstory of Korean immigrants achieving the “American Dream” by Business Insider is worth watching. 

Unlike the typical sad “decline of US malls”  story and rise of “online retail” the Forever 21 story has important lessons for all businesses. It is also an eerie reminder of the New Coke fiasco,  To recap, Coca Cola did not realize in the eighties that customers did not drink Coke for taste but  it was all about “being American” – a much deeper meaning.

Here is what the Forever 21 backstory tells us:

  1. Understand what “value” customers see in your product: Businesses are constantly working on getting “new” customers.In doing so, businesses lose sight of why their loyal customers buy from them ? Thus Forever 21 expanded stores and product lines within the mall as the video explains. Their main strength was new clothing designs – frequently changed- at affordable prices. That is why customers visited their stores.
  2. Be careful about scaling: Unlike McDonalds, Starbucks  or Coca Cola where your goal is to provide a  uniform product and experience , Forever 21’s strength was rapid changes in product assortment- depending on the fashion of the day. The supply chain was agile and used to working at short notice. As soon as stores started expanding – something probably went wrong in the supply chain cost structure. Our guess is that the core strength of rapid fashion changes was forgotten. Scale in number of physical outlets and the focus on keeping prices low made the company forget its core strength that their customers valued most. Namely, current fashion at low prices. Like New Coke, shopping at Forever 21 was not equal to shopping at the mall but went deeper. People wanted latest fashions to the extent that the next time they visited the store they would see completely new designs. This had stopped….. yet Forever21 could not pick up the signals….
  3. Test changes small-Listen to Social MediaThere is a reason that McDonald tries out new products (like the Impossible Burger) at a few stores first. They have ways of measuring customer response. If successful, they’d roll out the product nationally. Similarly,  Forever 21 could have tried the new business model (of static fashion i.e. not changing offerings for second visit of the customer) at a couple of stores and seen the response. They also did not pickup social media signals as customers returned unhappy in seeing “nothing new”. Yes, competition from niche online retail was another thing to address but probably that was a lesser problem for them. Since their old model of rapidly changing designs had a supply chain that worked, it only needed online alignment. 

We do hope that our readers will pick up something from the Forever 21 story. We wish the very best to Forever 21 in their efforts to restructure with Chapter 11. 

About StratoServe for Growth Strategy.

Purpose of a Corporation : What every American needs to know

One of the most exciting things for business over the 2019 summer was when the Business Roundtable put out a Statement on the “Purpose of the Corporation.” Signed by 181 American CEO’s all of whose brands are well known to consumers or businesses, the statement reflects the changing times. Download the  Roundtable Statement here and check out the 181 signatures from many CEO’s of companies you are already familiar with.

American politicians have been telling us what we know to be true – the “American Dream” eludes most folks today due to rapid changes in globalization and technology. Thankfully, leaders of American businesses have taken notice and have decided to move their focus from the “next quarter” to “long term shareholder value” on the shareholder element and have included all stakeholders in the “Purpose of the Corporation”. The times have truly changed in the last decade with all stakeholders having a voice on social media and the old dictum of “just focus on shareholder (short-term) value”  can no longer work.  See Eric Posner’s article “Milton Friedman was wrong” in the Atlantic.

This blog assumes that the Round Table CEO’s have positive intent and they really do want to switch from a next quarter approach to long term value for shareholders. So why have CEO’s collectively become so pious? That question deserves an entire post but three quick thoughts. (1) As Warren Buffet has been saying investors should think long term and Americans are listening with increasing appetite for index funds. It makes sense for CEO’s to align with the changing investor.(2) Politicians worldwide realize that only citizens in their country can vote and if unhappy then the election results can’t be good. The politicians of all persuasions are pressurizing companies  to look out for their voters (3) There was no social media when Milton Friedman suggested that if companies focussed on dividends then individual investors would have the freedom to choose what charity they would like to support. Although more efficient if companies directly engaged in charity through Corporate Social Responsibility (CSR)  – Friedman thought that the individual investor would be disenfranchised in not being able to decide on which stakeholder causes she/he would like to support. Today all stakeholders can speak out easily and do so with speed and vehemence, unimaginable even ten years ago. The CEO’s are forced to address stakeholder’s problems – after the fact -with a lot of collateral damage to their reputations (eg. big brands caught up in the opiate crisis ). The times are changing too rapidly to stay only with short term shareholder value….

In any case,  assuming that the CEO’s have positive intent here is how Americans in private life and in their roles as employees, consumers and as public  need to think about each element in the Corporate Purpose statement.

About StratoServe.

The recycling crisis -what should you NOT be putting in your recycle bin

Monday was   Earth Day and it’s a good time to think about the recycling crisis facing the US. Last year China that took in most of the developed world’s recyclable trash decided to up it’s quality standards.  Do recyclables going into  the recycle bin have quality standards ?– the surprised reader might wonder. Yes they do as this article in Mercury News explains. It is timely for all to understand what you should NOT be putting in the recycle bin.

In the US there has been a move from multi-stream recycling to single-stream recycling. Multi-stream refers to different recycling containers for paper ,plastic, metal, glass with the consumer doing the sorting upstream. Multi-stream recycling had a consumer adoption problem in that people were just not using them enough. To improve recycling adoption by consumers there was a massive move to go to single stream recycling where you had all types of recycling in one container. The idea was that recycling facilities in the US would manually (yes manually) sort out paper, plastic, metal and glass and put them into bales before shipping to China. Since there was a lot of mixing up of different categories of plastic only 25% of a plastic bale could be recycled and 75% went to a landfill in China. With a booming economy and 1.38 Billion people being rapidly westernized in consumption habits – China had its own waste to dispose off. Since last year China has refused to pick up contaminated bales beyond a 0.5% mix up or if it has liquid. As the Mercury News article explains, Chinese inspectors are inspecting consignments in the US before shipping because if a consignment is rejected in China there is a huge cost for the US exporter.

The US seems to have a still functioning (not totally globally outsourced) metal and heavy glass recycling industry and  the big problem seems to be paper and plastic that come not just from the grocery store but also from all those packages from Amazon.

StratoServe-How Cardboard Recycling WorksTo understand how recycling works in a factory sense one needs to go upstream in the supply chain for each packaging material and better understand how each broad category of paper and plastic work in packaging. Here is a recycling diagram for cardboard boxes and it is similar for plastic bottles and those cartons plastic bags that may be a combination of plastics/metal/paper. Plastics and aluminum foil tend to be in contact with the product and are particularly useful in preserving food freshness.  The boom in online sales has added a whole lot of outer packaging that’s needed in two separate rounds – the first is shipping to the retailer (or online retailer) and then a different box to mail to the online buyer. These paperboard cartons can be made with recycled paper but tend to be less stronger than those made with virgin wood pulp from trees. Buying the correct cardboard cartons that survive transportation but don’t cost too much is something that purchasing and supply managers give a lot of attention. Normally retail stores are well trained to properly dispose off outer cartons that tend to be for both transport and retail display. 

The consumer however, does not realize that there is no magic in the sorting of all the stuff we put into that recycling bin. Towns collect recyclables and have a detailed list of what to put into the recycle bin. Every member of a household needs to read their recycle list from their town and follow it exactly. And that is not easy to do or expect.

However, US towns are remarkable in their excellent self Government through elected officials. Communicating the recyclable list through schools, local newspapers, facebook groups and online and offline ads can get all residents to understand what to put into the recycle bin. 

If there is clarity on what   you should be putting into your recycle bin then there are two big benefits:

  • The perceived low value paper-plastic recycling industry will revive in the US and create many jobs
  • The environment will benefit 

Here is a list of what recycling our town allows– ( please check your own town website- Google “what I can’t recycle -name of your town”)  because they might have a different list depending on their recycling contractor.

About StratoServe for Growth Strategy.

How TJX and Costco drive foot traffic in the digital age

Costco and  TJX Group (including brands like TJMax, Marshalls, HomeGoods etc.)  seem to be always crowded. And when you look at long checkout lines you know they must be doing something right to drive foot traffic in the digital age. TJX describes itself as an “off price” apparel and home fashions retailer while  Costco  is a paid membership bulk retailer focussed on quality products for their members, a commitment to employees and suppliers as mentioned on the Costco About Us section.

No matter what your brick based organization (including  healthcare and banks) – if customers can receive services online. They will avoid the friction that comes with visiting the store. For example, in medicine,  tasks like appointments, test results, refill requests, billing are digitized and patients extensively Google before meeting the doctor. Think about banking – when was the last time you went to a bank branch?… you get the picture.

Here are some video tips on shopping at TJMax  :

We were thoroughly intrigued by the observation that there is substantial traffic in TJX and Costco while US malls tend to be desolate. Here is our take:

  • Surprise and Delight  This seems to be the mantra for both TJX and Costco. The TJX shopper feels the excitement of  a flea market except that the brands are top names and the merchandise is new. The aisles are pretty stable so you would see the pants in the same place except that seasonal changes might be upfront. Costco follows a horseshoe layout (see first video above) but moves things around to add to the “surprise ” element.They seem to put out the most recent and fashionable stuff on the front of the aisles. the assortment is as expected, every time, but the specifics are a process of discovery and everyone seems to take great delight in finding deals.   For Costco , you know that you’ll get milk, eggs and toilet paper but the aisles of random stuff like “Coconut Clusters” with tastings makes buying easy. 
  • Encourage returns: At TJX you can try out whatever you want to and the fitting room counter lady (in most stores!) seem to be a little intimidating. Wonder if this is a strategy for you to simply buy and take the stuff home. If it is already reached home – there is an exponentially better chance that you’ll keep it ! Costco is famous for its return policy – but if it has reached your basement store- then the likelihood of hanging on to stuff increases. We don’t have access to data but it is  likely that people buy more than they return on a visit. Only a small fraction of shoppers seem to bring in returns that must be tagged after you show your membership card.
  • No in-aisle customer service: There is really no in-aisle customer service. While Costco has loyal members TJX seems to have perfected the art of making shoppers feel like members. This transfer of “responsibility” (to shop!)  to the customer is quite amazing. Educators and healthcare needs to pick up some ideas here. Perhaps it is the full package that encourages such “ownership”.
  • Can’t beat the price: Try searching online for a better price and you’ll be disappointed at both TJX and Costco particularly for under $10 items. There must be a whole lot of research going into setting store prices.
  • No way to look at store inventory before visit: This is absolutely brilliant. You cannot look for inventory for a particular item in a particular store at TJX without physically visiting it. You can leave an online store in seconds but if you enter a physical store between parking and searching you are looking at an hour or more- that many actually like to spend.  At Costco the in-store prices tend to be better than online prices and there is a different assortment in both particularly for the “long tail” surprise-delight items.
  • Email and Text: Both companies are active in reminding you that the “discounts” are disappearing- so it’s not that they are lagging behind in digital marketing.
  • Hours and Directions available online: For both TJX and Costco hours are quickly available on your mobile phone. They do want  you to come in but enjoy the fun of a visit while actually visiting.
  • Employee Focus: You really can’t do the above without employees who are very engaged and thinking about improving the customer experience. And lot of the hard work is done behind the scenes working with suppliers and systems. It does appear that the employee page at TJX  and the employee section  at Costco are not just “company speak”.

Clearly, something to learn for all  organizations that have products or services delivered from physical buildings. 

About StratoServe for Growth Strategy.

Why Dollar Stores are doing pretty well in a digital world

Next time you pass a Dollar Store in the US (including Dollar Tree and Dollar General) observe the parking lot. In towns rich and not so rich you’ll find that the parking lot is full most of the time.If you have not gone into a Dollar Store recently – do so and then compare the merchandise to Walmart. For a dollar the quality is not bad.

Dollar Stores took off after the 2008 recession and there are more Dollar Stores than McDonald’s in the USA.  Between Dollar Tree and Dollar General there are 30,000 stores and these are very densely seen in the mid-west and the farmlands of middle America.  A recent article “Sign of hope or worry- when the dollar store comes to town”  describes the mixed bag that these stores are for local communities.

And here is our take on the success of the dollar store model in the USA.

  1. What you can buy at Dollar Stores: There is  a  list of (low risk) items like decorating paper and a gift bag that you can buy at a Dollar Store. In fact here is a list of recommended 21 items from money talk news.  If you are wondering about buying food and over the counter(OTC)  medicines from the dollar store – they do seem legitimate brands and the only thing to watch for are the expiry dates. See advice from Quora about buying food from the Dollar Store. One community downside is that  the Greeting Card neighborhood stores are dying out  just as  bigger stores with retail space for these items is cutting back.  On the food front Dollar Stores have started fresh produce and reports indicate that the quality is as good as supermarkets.
  2. Easy location: Dollar stores tend to be in  easily accessible locations  but generally not too near a Wal-Mart or Target. In their product assortment, the risk per item is only a dollar so the consumer tends to feel that they can’t really loose.
  3. Once inside – you tend to pick up things: Once inside the store searching and finding one item you tend to pick up more items. Most customers seem to be checking out with 5-6 items and spending at least $10 each.
  4. The core target market: According to one estimate  the core target market were families earning less than $35,000 and on some form of Government assistance. However, more affluent folks in the neighborhood seem to be flocking to the dollar store. This does not help the local grocery store or the stationery and gifts store because they simply cannot compete with the buying and logistics strengths of the dollar store industry.
  5. Bottom of the pyramid focus :   Bottom of the pyramid  (BoP) is a concept  used to understand  lower income market segments in developing countries.The Dollar Store industry is sharply focussed on the US Bottom of the Pyramid market.Given the core target market of the dollar store industry certain products seem to have high margins. You get the picture when you see one roll of toilet paper sold for $1.

For the consumer and the Dollar Store franchisee the Dollar Store is a win for many products. And the dollar store industry seems to have found a niche in brick retail that Amazon can’t touch.

For the Dollar Store consumer is unwilling and  sometimes unable  to pay shipping or buy an Amazon prime membership.  Amazon too recognizes this and their One Dollar Amazon  Items page does not really have many one dollar items. Similarly Walmart does not have a  $1 aisle.

The Dollar Store industry model seems to be working against big online stores like Amazon and big brick retail  like Walmart.

About StratoServe for Growth Strategy.

What is 5 G? How marketers can get ready for 2020

5G is the 5th generation cell technology as the video above  and PCMag explains. Imagine that you have better connectivity than cable from your 5G hotspot or mobile and may as well truly cut the cord.Watch movies, play video games, enjoy virtual reality all through the 5G connection.

States like Connecticut are trying to get in early on this. US cell phone companies AT&T and Verizon have already rolled out their 5G offering and 2020 will be when major diffusion of 5G occurs. Just as the “Gig economy”  took off with the previous 4G smart phones- expect a whole new slew of innovation with 5G.

The two biggest attractions for marketers with 5G will be:

  • Mobility: With mobile use already at 3 hours 35 minutes a day in the US expectations are that mobile will surpass TV in terms of time spent in 2019. And that’s before 5G really kicks in.
  • Fast=Decrease in latency: Latency or the delay between asking and getting replies due to network speeds will vastly improve. Google will get you even faster replies but even your messaging can get faster. The day is not far away when at a restaurant you see the dessert ads on your phone even before the waiter asks at the end of your meal!

So what should marketers be doing to get ready for 2020? It depends on where you are in the mobile race but here are three basic tips:

  1. Be mobile friendly: No matter what your company size or web presence make sure that your website is mobile friendly. Check mobile friendliness here.
  2. Reduce speed clutter at your end: OK 5G is better than 4 G but test your mobile site clutter here. Fix the bottlenecks at your end so that you are not causing delays in response to customers.
  3. Ensure that you see https: Look at your home page URL and if you don’t see “https” or the lock sign you see at your banks website get your website secured. Currently Google Chrome declares your http:// site to be “Not secure” and that’s bad for visitor confidence. Surprisingly major organizations seem to be lagging on this.

If you have nailed the above it is time to think about how you can improve your customer relationship across the customer lifecycle. More in a later post.

About StratoServe for Growth Strategy.

Github acquisition by Microsoft: Managing in the Knowledge Age

Enter big, bad, old world, clunky Microsoft who acquired Github last year and the Internet exploded with jokes. Both Bill Gates and Steve Balmer were tough industrial age managers and Satya Nadella realized that the world had changed- see “How Microsoft got its groove back.”

Think of any failing  sector like retail, conglomerates  (GE) and you find highly educated  leaders trying to implement Business School knowledge that was developed in the Industrial Age. Here is how the industrial age and its management worked

You find a customer need or have a technology (eg Henry Ford and the car) and build a factory. Now you are locked in to your assembly line and are committed to optimize, optimize as you make more and more rules for the employee. Meanwhile the employee has changed ….

In the last decade, younger folks worldwide have the internet, mobile phone and are constantly on social media. Younger people are more than willing to pursue what they love, despite lesser pay.At worst, food, clothing and shelter in the basement is available through parents . Millennials see lesser value for expensive brands compared to the baby boomers who grew up in the industrial age. Since affording expensive brands is not a priority, high income is not as meaningful for millennials.

So how do you manage in the knowledge age?

The excellent article “These three management styles belong to the past” by Paulo Gallo  provides great pointers and here is our take:

  • Every employee must feel that this is their organization: This is the holy grail of management and very hard to do. Genuinely asking employees for solutions and considering those suggestions very seriously makes employees feel valued. Once you get a suggestion and decide to do something different merely communicating your reasons to the employee can help the sense of ownership. People want to be heard and will come back to contribute on a project even if that’s not what they initially suggested.
  • Command and control is out- shared vision and purpose is in: Since no employee in the knowledge age is an assembly line worker it becomes critical to unlock the “happy” intellectual energy of the individual.  A sense of greater purpose across the organization must exist that is different from the old “vision” thing. The purpose must be reinforced at every turn. And this purpose needs to go beyond profit to something nobler. The mere fact that your business exists and you have ongoing customers indicates that you are making a difference to your customer. Simply asking how you are making the world better? is a get way to get started on  articulating your organization’s purpose.

The underlying logic of change at Microsoft under Satya Nadella is an inspiration for all organizations.

About StratoServe for Growth Strategy.

“Dating Sunday” and Customer Relationship Management

Today January 6 is “Dating Sunday”. The day is being actively promoted by the Dating App industry –they need a Black Friday too!  Some fun facts:

  • About 50% Americans describe themselves as single
  • Romantic love is different from familial love and spiritual love and has the intent of a long term relationship i.e marriage
  • Thus the romantic apps (OkCupid,Match.com,eHarmony) are different from “hook up” apps like Tinder
  • A 70% spike in romantic apps usage is expected on Sunday night
  • Holidays with parental family are over and singles are lonely and this window of finding someone is open only till Valentine’s day according to USA Today.

As mentioned in previous posts the tectonic shift in marketing thinking occurred  in the late 1980’s and 1990’s particularly with the publication of Dwyer, Schurr and Oh (1987) that spelt out the parallel between the long term human marriage and business relationships. It was earlier in Europe that scholars of the European Industrial Marketing and Purchasing Group figured out that B2B relationships are long term that B2B marketers who really sold anything already did.

Similarly in B2C marketers had been using customer  relationships data for a hundred years in direct mail. Naturally, things became much more easier with computers, internet and the mobile phone in the last  ten years. Modern CRM systems including the grocery loyalty card try to emulate the mail order wizards of long years ago.

Just like dating apps technology can make initial contact easier but the couple (called B2B  dyads in academe) need to make it work. Some thoughts on B2B vs B2C:

  • In B2B there is an existing something that a customer is already buying from a supplier. There is a great deal of inter-locking with the value chain of the buying firm. Its a challenge to dislodge an existing supplier whose value delivery and relationship is going well- unless your value proposition is significantly better
  • B2C is different particularly for low value items. Brand loyalty is in decline, particularly among millennials, so an Amazon Prime deal looks great and worth trying 

All the best to the singles out there on this #DatingSunday!

About StratoServe for Growth Strategy.

The Furniture Brand Fiasco – resolve to Google your brand reviews in 2019

BrandReviews 2019StratoServe

2019 has rolled in and  understanding the digital assault on Brands is timely.

We wanted to replace a sofa over the holidays and things became very confusing – very quickly. Furniture is an interesting category in the US with multiple brands trying to sell nationally, regionally and locally with wide variations in price. There is a lot of movement to online  buying for all categories of furnishing and furniture. See statistics of the US furniture market at Statista.

The problem is:

Almost all furniture brands have poor reviews and customer feedback

Most brands advertise on Google so Google ads are in full display. But brand owners don’t seem to Google their own brands. How could many brands with 1.5 star reviews still be in the market? Our guess is that managements don’t seem to checking. If they checked, they’d find solutions to this brand fiasco.

Marketing as currently taught involves (1) Identifying a customer need (2) Providing a high value solution ( 3) The high value is made up of the 4P’s of marketing viz. a great Product, a great Price, great Place (Distribution) and then great Promotion (including online ads, social media etc.).

Missing in all this is the ease with which customers can do research online today. And this “research” is often faulty because its easy for a dissatisfied customer and too easy for a competitor to make up bad experiences. For example, if a brand has hundreds of bad reviews on websites (just Google a few furniture brands and see for yourself)- it doesn’t make sense that there are no unresolved BBB customer complaints and these brands seem to have impressive foot traffic.

Beyond furniture, many many local and regional business in different industries (eg. home services) will find that their reviews are mixed. So if you are a plumbing company you might find great reviews on Angies List/Home Advisor and bad reviews on your company Facebook page that you have been neglecting recently.

Here are 5 tips to make the most of 2019 with respect to your brand reviews:

  1. Recognize that the days of traditional marketing and one way communication are over. As a brand owner you cannot hope to “command and control” what you want your customers and the world to know.
  2. Assume that your customers will Google your product/brand
  3. So put yourself in your customers’ shoes and Google your “(brandname) reviews”. To get a sense of different search results try while you are logged in to your Google account and also when you are using a browser where you are not logged in. See the Google Ads but focus on the organic search results. Do this from your mobile phone as well as desktop.
  4. If you have other locations for customers then ask someone in that location to check as above, or try one of the options for local search listed at Search Engine Journal.
  5. Repeat for other relevant websites to your industry eg. Angies List and Home Advisor for home services, Yelp for restaurants etc. Do check comments and ratings on your brands social media accounts including Facebook, Instagram, LinkedIn etc. There are services like www.ReviewPush.com that consolidate reviews in one place and are worth checking out.

Once you know what is going on, reach out to the relevant websites to correct any misinformation out there. Be polite but insistent- it works!

Wishing our readers a happy healthy 2019!

About StratoServe for Growth Strategy.

Unlocking Innovation: What does our Customer Success Tomorrow look like?

Customer Success-StratoServe
“Marketing” means different things to different people and no one really checks out the American Marketing Association definition. It’s hard to convince everyone in an organization – that their role includes “marketing” and focussing on constant innovation. Hence the term “Customer Success.”

The Customer Success term is particularly popular in  the SAAS (Software as a Service ) industry. SAAS  companies  need customer renewals  and are trying to align everyone including programmers, sales ,finance  to working towards customer success.

With Customer Success, the customer defines success and this keeps changing with time. There are three forces working here:

  1. Technology: Technology changes fast and if you do not keep all eyes on your customer success: You miss the boat. For example, cell phones now have excellent cameras that you can make videos with. Consequently, the digital average camera  market has disappeared. Similarly with cell towers giving out good wireless signals you suddenly don’t see GPS devices being sold in US retail. Car makers are shy of selling $2000 GPS as original equipment. Customers at car showrooms actually laugh (loudly!) at suggestions of a pre-installed car GPS.
  2. Customer is constantly learning: No matter what your product or service- your customer keeps learning- fast. Their knowledge and skills improve- fast with your product, their own goals and competitor offerings.  Just think of a GPS user – who now relies on her/his cell phone. This customer went through a time when they probably had both devices in the car because wireless was less reliable. Now customers have learnt about different mapping apps that give driving directions including Google Maps and Waze.
  3. Customer learning is very easy: If you have lesser calls coming to your tech-help call center don’t assume that your product has become easier. It’s just that your customers are finding easy answers on the web- that work! No customer wants to interact with a business in person or phone because it takes time and possible frustration (the old press 1, press 2 routine for call centers). Besides, the employee is Googling the answer anyway. Instead, customers find solutions online that work. For most common and sometimes uncommon problems answers are on the first page of Google with even videos on YouTube. Learning sources includes all global solutions and competitors.

These three forces together are upending marketing that assumed that the customer was passive and just waiting for the right “marketing message” that explained why she should buy our product. Instead the customer is empowered to make choices with all the information (so easily)  available.

With an empowered customer who is “showrooming” -its fatal for marketers to think that if only you got your message to your target customer- you could win. Not so. Because the customer is always learning and demanding at least what is available online. Thus working towards customer success may be the alternative to get the entire organization on the marketing page.

What is customer success? To us, customer success is about where your customer wants to go tomorrow.Your product may take the customer to where she wants to be today but the product may become irrelevant due to the rapid influence of the three forces above.

Our idea of customer success builds on the great idea of Michael Schrage Who do you want your customer to become?. Schrage suggests that Henry Ford did not just create a car but created customers who started driving. Now think of all the movies you have seen where driving was an integral part of romance, action and crime!

There was no automatic feedback loop for Henry Ford to improve the car and make it better . Ford motors had to rely on traditional market research in the early days  and today probably has a whole lot of data coming in from dealers and customers. Like the aircraft industry the auto industry is also adopting Internet of Things (IoT) and your maintenance reminders will get smarter.

Google on the other hand depends on searcher feedback to make the search engine better and better. If people think that an answer is good that answer is pushed up in SEO and Google becomes better next time that query pops up.In the process, when more customers view a page or video it signals that it is answering the query the customer had typed. The customer really does not have to share a page on Facebook for the page to become better ranked. Views of a page against a search query is good enough to rank the page higher. This is the reason that we watch YouTube videos that have higher page views and traditional media talks about how many views a video or TED talk has.It ‘s hard to build a product like Google that automatically becomes better every time someone uses it. If you think about it, legendary brands like  Coca Cola do not have an automatic machine based system of becoming better. However digital businesses like Amazon and Netflix rapidly use big data to improve their recommendation engines.Sometimes you do feel that the suggestions are right and not simply up-sell tactics.

Here is how to think about Customer Success when you want to unlock innovation in your organization:

Customer Success for Today: The idea of customer success forces the entire organization to look at whether the customer is successful today and ask ourselves what we can do to make customer success happen in our individual organizational roles. For example, if you asked Accounts Payable about their role in Marketing, you might get a confused look. However, if you asked “How could you help our customer success?” your friend in Accounts Payable would remember that they take 7-10 days for refunds and reducing that time would go towards more customer success.

Customer Success for Tomorrow: Is much harder to guess unless you are thinking in the “customers shoes”. Most search advertisers try to buy competitor brand names  keywords instead of trying to understand the customer learning forces that are at work. What a competitor’s customer is searching for beyond the competitors brand name is far more insightful about where the customer wants to go. No matter what you sell, your customer is getting better in terms of knowledge and skills and naturally customer expectations are rising every day.

Asking every member of your organization (including the Janitor) the constant question What does our Customer Success Tomorrow look like?  may be the key to unlocking constant innovation. About StratoServe.